• Home
  • Politics
  • Health
  • World
  • Business
  • Finance
  • Tech
  • More
    • Sports
    • Entertainment
    • Lifestyle
What's Hot

Short and Funny Sayings for a Happy Summer with Friends

May 9, 2025

Trump Announces First Post-Tariff Trade Deal

May 8, 2025

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025
Facebook Twitter Instagram
  • Contact
  • Privacy Policy
  • Terms & Conditions
Friday, May 9
Patriot Now NewsPatriot Now News
  • Home
  • Politics

    Security video shows brazen sexual assault of California woman by homeless man

    October 24, 2023

    Woman makes disturbing discovery after her boyfriend chases away home intruder who stabbed him

    October 24, 2023

    Poll finds Americans overwhelmingly support Israel’s war on Hamas, but younger Americans defend Hamas

    October 24, 2023

    Off-duty pilot charged with 83 counts of attempted murder after allegedly trying to shut off engines midflight on Alaska Airlines

    October 23, 2023

    Leaked audio of Shelia Jackson Lee abusively cursing staffer

    October 22, 2023
  • Health

    Disparities In Cataract Care Are A Sorry Sight

    October 16, 2023

    Vaccine Stocks—Including Pfizer, Moderna, BioNTech And Novavax—Slide Amid Plummeting Demand

    October 16, 2023

    Long-term steroid use should be a last resort

    October 16, 2023

    Rite Aid Files For Bankruptcy With More ‘Underperforming Stores’ To Close

    October 16, 2023

    Who’s Still Dying From Complications Related To Covid-19?

    October 16, 2023
  • World

    New York Democrat Dan Goldman Accuses ‘Conservatives in the South’ of Holding Rallies with ‘Swastikas’

    October 13, 2023

    IDF Ret. Major General Describes Rushing to Save Son, Granddaughter During Hamas Invasion

    October 13, 2023

    Black Lives Matter Group Deletes Tweet Showing Support for Hamas 

    October 13, 2023

    AOC Denounces NYC Rally Cheering Hamas Terrorism: ‘Unacceptable’

    October 13, 2023

    L.A. Prosecutors Call Out Soros-Backed Gascón for Silence on Israel

    October 13, 2023
  • Business

    Trump Announces First Post-Tariff Trade Deal

    May 8, 2025

    Electric Vehicle Sales Nosedive As GOP Takes Buzzsaw To Biden’s Mandate

    May 7, 2025

    Tyson Foods Announces It Will Bend The Knee To Trump Admin’s New Rules

    May 7, 2025

    Federal Reserve Holds Interest Rates Steady Despite Pressure From Trump

    May 7, 2025

    ‘Wait Them Out’: John Kennedy Tells Larry Kudlow One Lie He Suspects China’s Telling US

    May 7, 2025
  • Finance

    Ending China’s De Minimis Exception Brings 3 Benefits for Americans

    April 17, 2025

    The Trump Tariff Shock Should Push Indonesia to Reform Its Economy

    April 17, 2025

    Tariff Talks an Opportunity to Reinvigorate the Japan-US Alliance

    April 17, 2025

    How China’s Companies Are Responding to the US Trade War

    April 16, 2025

    The US Flip-flop Over H20 Chip Restrictions 

    April 16, 2025
  • Tech

    Cruz Confronts Zuckerberg on Pointless Warning for Child Porn Searches

    February 2, 2024

    FTX Abandons Plans to Relaunch Crypto Exchange, Commits to Full Repayment of Customers and Creditors

    February 2, 2024

    Elon Musk Proposes Tesla Reincorporates in Texas After Delaware Judge Voids Pay Package

    February 2, 2024

    Tesla’s Elon Musk Tops Disney’s Bob Iger as Most Overrated Chief Executive

    February 2, 2024

    Mark Zuckerberg’s Wealth Grew $84 Billion in 2023 as Pedophiles Target Children on Facebook, Instagram

    February 2, 2024
  • More
    • Sports
    • Entertainment
    • Lifestyle
Patriot Now NewsPatriot Now News
Home»Finance»An Attractive Option for Monthly Dividend Investors
Finance

An Attractive Option for Monthly Dividend Investors

September 23, 2023No Comments5 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Email
An Attractive Option for Monthly Dividend Investors
Share
Facebook Twitter LinkedIn Pinterest Email

Monthly dividend ETFs have become a popular investment category in recent years, and why not? Building a portfolio of dividend ETFs that pay you each month is a great way to build a diversified and predictable stream of passive income that will compound over time. The Amplify CWP Enhanced Dividend ETF (NYSEARCA:DIVO) is one interesting option in this class for investors to consider.

DIVO’s dividend yield of 4.9% is not as high as some of the other popular names in the space, like the JPMorgan Premium Equity Income ETF (NYSEARCA:JEPI) or the JPMorgan Nasdaq Equity Premium ETF (NASDAQ:JEPQ) which boast dividend yields of 9.7% and 11.5%, respectively. But DIVO is still a viable option for income investors to consider as it offers a nice mix of yield and performance as we’ll delve into below.

What is DIVO ETF’s Strategy? 

DIVO is an actively managed ETF, comprises a portfolio of top-tier dividend-focused stocks supplemented with covered calls on individual stocks. Its primary goal is to mirror the investment results of the Enhanced Dividend Income Portfolio (EDIP), a strategy managed by DIVO’s sub-adviser, Capital Wealth Planning (CWP). Since its launch in 2016, DIVO has impressively grown its assets under management (AUM) to reach $2.9 billion.

DIVO generates income by owning dividend-paying stocks and by “opportunistically writing covered calls on those stocks.” DIVO seeks to generate gross annual-income of 2-3% from dividend income and 2-4% from option premiums. DIVO strikes a nice balance here and this seems like a sustainable long-term strategy.

One potential downside of this strategy that should be noted is that by selling covered calls against its positions, some of DIVO’s upside from capital appreciation is likely capped. This is because selling covered calls caps the upside of its holdings. If the price of the underlying stock rises beyond the strike price, DIVO forgoes these additional gains.

See also  Fed hawkishness prompts HSBC to raise 10-year Treasury yield target

DIVO’s Holdings

Investors should be aware that DIVO is not particularly diversified. The fund holds just 25 positions, and its top 10 holdings account for 58.9% of its assets. Below, you’ll find an overview of DIVO’s top 10 holdings using TipRanks’ holdings tool.

DIVO’s largest position isn’t a stock at all, but a fixed income mutual fund that holds short-term government bonds and treasuries. This position makes up 12.8% of the fund. In the current rising interest rate environment, this doesn’t seem like a bad way for a dividend ETF to diversify its exposure as treasuries now feature competitive yields.

Outside of this fixed income position, DIVO owns many large-cap, blue chip U.S. stocks ranging from Microsoft and Apple to JPMorgan Chase and Goldman Sachs.

The fund is well-diversified in terms of sector exposure, as no S&P 500 industry accounts for more than 20% of the fund (financials and healthcare both have weightings of 17%).

Excluding the fixed income position, DIVO’s top 10 holdings collectively feature a strong group of Smart Scores. The Smart Score is a proprietary quantitative stock scoring system created by TipRanks. It gives stocks a score from 1 to 10 based on eight market key factors. A score of 8 or above is equivalent to an Outperform rating. Excluding the fixed income position, six of DIVO’s top nine holdings feature Outperform-equivalent Smart Scores of 8 or better. Visa and JPMorgan Chase lead the way with perfect 10 Smart Scores.

DIVO features an Outperform-equivalent ETF Smart Score of 8.

Is DIVO Stock a Buy, According to Analysts? 

See also  Stocks Lower as Investors Face Gut Check on Rally: Markets Wrap

Turning to Wall Street, DIVO earns a Moderate Buy consensus rating based on 20 Buys, 5 Holds, and zero Sell ratings assigned in the past three months. The average DIVO stock price target of $40.60 implies ~15% upside potential.

Total Returns

As alluded to in the intro, DIVO is interesting because it offers an attractive mix of yield and performance. Some ETFs with high yields turn out to be ‘yield traps’. They attract investors with high yields but then lose money on an overall basis with negative total returns over time. That isn’t the case with DIVO. Again, its yield of 4.9% may not jump off the page at you, but its combination of yield and total return are attractive.

The fund has returned 9.1% over the past year. It has posted solid double-digit annualized returns of 10.5% and 10.1% over the past three and five years respectively. Since its inception in 2016, it has an annualized total return of 11.3%. Investing in vehicles that generate double-digit returns over a prolonged time frame is a great way to build long-term wealth.

Fees and Expenses

The only real downside of DIVO is its relatively high expense ratio of 0.55%. This expense ratio means that an investor allocating $10,000 into DIVO will pay $55 in fees over the course of the year. If this investor held DIVO for ten years, they would pay $689 in fees, assuming the expense ratio remains at 0.55% and the fund returns 5% per year.

These fees are a bit high, but DIVO is an actively-managed fund and it runs a fairly complex investment strategy, so it makes sense that it is more expensive than  the typical index fund. Within the realm of monthly dividend ETFs, it is more expensive than the larger JEPI or JEPQ, which both charge 0.35%, but it isn’t out of line with these peers.

See also  The Global Battle for Chip Talent: South Korea’s Strategic Dilemma

Looking Ahead 

While its yield may not be as high as some of the other monthly dividend ETFs, DIVO offers a nice mix of yield and long-term performance, and its monthly payout is attractive to dividend investors. I like its balanced strategy of seeking to generate 2-3% gross income through dividend payments and 2-4% through options premiums. The main downside investors should be aware of is that its fees are a bit high, though not out of line. DIVO is a viable option for monthly dividend investors to consider adding to their portfolios. For investors who already own other monthly dividend ETFs, DIVO could also be a good way to diversify by adding another monthly dividend payer with a strong return profile into the mix.

Disclosure

Disclaimer

Attractive Dividend investors monthly option
Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Posts

What Is The Best Option For Veterans Needing In-Home Care?

April 28, 2025

Ending China’s De Minimis Exception Brings 3 Benefits for Americans

April 17, 2025

The Trump Tariff Shock Should Push Indonesia to Reform Its Economy

April 17, 2025

Tariff Talks an Opportunity to Reinvigorate the Japan-US Alliance

April 17, 2025
Add A Comment

Leave A Reply Cancel Reply

Top Posts

Rivian Reports Weak Earnings, Stock Drops Almost 17%

March 8, 2023

Biden’s Signature Climate Law Is Falling Short On Its Goal To Boost American Manufacturing

May 3, 2024

Who’s in charge of the Covid response after the emergency ends?

May 9, 2023

FACT CHECK: Video Does Not Show Supernova Festival Goers Running For Their Lives

October 11, 2023
Don't Miss

Short and Funny Sayings for a Happy Summer with Friends

Lifestyle May 9, 2025

I love the beach. Just looking at the calming sea to relax. Having fun in…

Trump Announces First Post-Tariff Trade Deal

May 8, 2025

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025

Top 10 Benefits Of Acupuncture

May 8, 2025
About
About

This is your World, Tech, Health, Entertainment and Sports website. We provide the latest breaking news straight from the News industry.

We're social. Connect with us:

Facebook Twitter Instagram Pinterest
Categories
  • Business (4,110)
  • Entertainment (4,220)
  • Finance (3,202)
  • Health (1,938)
  • Lifestyle (1,627)
  • Politics (3,084)
  • Sports (4,036)
  • Tech (2,006)
  • Uncategorized (4)
  • World (3,944)
Our Picks

This Japanese Moisturizer Is the Secret to ‘Mochi Skin’

April 30, 2023

Desperate Disney+ Temporarily Slashes Cost to $1.99 Per Month

September 7, 2023

US Sends Warning to China After Philippines Coast Guard Vessel is Blinded by ‘Military-Grade’ Lasers

February 15, 2023
Popular Posts

Short and Funny Sayings for a Happy Summer with Friends

May 9, 2025

Trump Announces First Post-Tariff Trade Deal

May 8, 2025

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025
© 2025 Patriotnownews.com - All rights reserved.
  • Contact
  • Privacy Policy
  • Terms & Conditions

Type above and press Enter to search. Press Esc to cancel.